Fred Astaire Dance Studio Franchise Costs, Fees & FDD

Year Business Began: 1947

Franchising Since: 1947

Headquarters: Enfield, Connecticut

Estimated Number of Units: 260

Franchise Description: The franchisor is FADS USA, Inc. (formerly known as Megadance USA Corp.). The franchisor offers franchises for the establishment and operation of a studio specializing in dance and dance fitness classes led by its trained instructors (referred to as Astaire Pros). The franchisor markets its classes to customers of all ages and economic levels, but targets adults between the ages of 18 and 75.
Training Overview: The required trainees must personally attend and satisfactorily complete the initial training program before franchisees open their studio. Initial training currently consists of three consecutive days of training to be held at the franchisor’s offices (or such other location that the franchisor designates in writing) before the opening deadline. The initial training may also include e-learning modules. The franchisor will determine, in its discretion, what constitutes successful completion of initial training. The franchisor may periodically conduct mandatory or optional training programs for required trainees and/or franchisees’ employees at its office or another location that the franchisor designates.

Territory Granted: Once franchisees have secured their site, the franchisor will provide an area in which they will have certain rights (the territory). The territory will be determined based upon the density and demographics of the geographic area around the studio. For example, if the studio is located in a major metropolitan area or heavily populated business district, the size of the territory may be smaller than if the studio is located in a rural or suburban location. Typically, the minimum size of the territory will be 15,000 people. The size of the territory will vary from the territory granted to other franchisees based on the location and demographics surrounding a studio. During the term of the Franchise Agreement, provided franchisees are not in default under the Franchise Agreement (including their obligation to meet their performance standards), the franchisor will not operate, or license others to operate, a studio using the FADS system and the marks inside the territory.

Obligations and Restrictions: At all times that the studio is open for business, it must be under the personal, on-premises supervision of either franchisees, their operating principal, their key manager or a trained attendant. The key manager or another trained manager must be available at all times the studio is open for business. Franchisees or their operating principal and their key manager must successfully complete the training program and any other training programs that the franchisor may require. Franchisees may not permit their studio to be operated, managed, directed or controlled by any other person without the franchisor’s prior written permission. The operating principal must have at least a 10% ownership interest in the entity, must have authority over all business decisions related to the studio and must have the power to bind the franchisee in all dealings with the franchisor. Franchisees may offer for sale in their studio only the products and services that the franchisor has approved in writing. In addition, franchisees must offer the specific products and services that the franchisor identifies in the manuals, or otherwise in writing, as required products and services.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees meet the conditions, they may enter into one successor 10-year renewal term which may contain materially different terms than the original Franchise Agreement.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or an obligation.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$35,000	$60,000
Initial Training Fee	$0	$5,000
Travel Expenses to Training	$1,000	$3,500
Security Deposits for Leasehold and/or Utilities	$8,500	$25,500
Rent for 3 Months	$25,500	$60,000
Construction Management	$0	$15,000
Construction Due Diligence	$1,000	$5,000
Design, Architecture, Engineering	$7,000	$25,000
Construction Permits and Permit Management	$1,000	$10,000
Net Leasehold Improvements	$100,000	$250,000
Furniture, Fixtures and Equipment	$10,000	$30,000
Studio Management and Technology System Components	$5,000	$20,000
Signage and Graphics	$10,000	$15,000
Supplies and Accessories	$4,000	$14,000
Supplies and Marketing Materials	$1,000	$1,000
Business Licenses	$500	$2,500
Technology Fee for 3 Months	$600	$600
Professional Fees	$2,500	$10,000
Insurance	$3,000	$5,500
Captive Market Insurance	$25,600	$25,600
Grand Opening Marketing Budget	$5,000	$5,000
Working Capital for 3 Months	$50,000	$70,000
ESTIMATED TOTAL	$296,200	$658,200

 
Other Fees

Type of Fee	Amount
Royalty Fee	7% of gross revenue for the preceding week.
Performance Royalty Fee	The difference between the amount of royalty fees actually paid and the amount of royalty fees franchisees would have paid if they had met their minimum performance levels.
Renewal Fee	50% of the original franchise fee.
Advertising Fee	Currently, $150.
Technology Fee	Currently, $50 per week for the first year of the initial term; $75 per week for the second year of the initial term; and $100 per week for the third year and each subsequent year of the initial term, subject to change annually in increments of $25 upon written notice to franchisees.
Initial Licensing Fees	Then-current fee.
PCI Compliance Program	Then-current fee.
Transfer Fee	The greater of $4,000 or 2% of the purchase price for any transfer resulting in a change of control; $2,500 for non-change of control transfers and transfers to entities for convenience of ownership.
Relocation Fee	$2,500
Non-Compliance Fee	$150
Interest and Late Fees	10% per annum (or the maximum rate permitted by law if less than 10%) calculated from the due date until paid and compounded weekly, plus $25 for each week or portion of a week that a payment is paid after the due date for the payment specified.
Initial Training for Additional or Replacement Trainees	Currently, $2,500 per trainee.
Optional Training Programs	Varies based on program.
Remedial Training Fee	Currently, $500 per day or partial day.
Consulting Fee	Currently, $500 per employee or agent for each full or partial day, plus any travel and living expenses for each employee or agent.
Continuing Business Education Fee	Currently, $250 per hour per person trained.
Required Conferences	Reasonable registration fee.
Temporary Key Manager	Currently, the sum of (i) the actual costs and expenses incurred; and (ii) the temporary key manager’s salary and travel and living expenses.
Temporary Astaire Pro	Currently, $500 per Astaire Pro for each full or partial day, plus their travel and living expenses.
Product, Service, Supplier and Service Provider Review	The franchisor’s reasonable cost of the inspection and its actual cost of testing the proposed product or evaluating the proposed service or service provider, including personnel and travel costs.
Independent Competition Fee	Currently, $500 per student or Astaire Pro from the franchisee’s studio.
Competition Fee	$300 per member, in the aggregate for that calendar year for student or Astaire Pro that the franchisee failed to send to international competitions and regional competitions.
Music License Fee	$1,100 per year or $30 per week.
Insurance	Cost and expenses of the premium plus a reasonable fee for the franchisor’s services in procuring the insurance.
Escrow	Currently, $5,000 to $25,000 plus 3% of gross revenue per month until $25,000 in escrow account.
Captive Market Insurance	Currently, $200 to $800 per month.
Local Marketing Spending Requirement	2% of gross revenue for the previous quarter.
Grand Opening Advertising	A minimum of $5,000.
Advertising Cooperative	If a cooperate is formed in their area, franchisees must pay the then-current fee for their regional or local advertising cooperative.
Optional Fred Astaire Marketing (FAM) Assistance	$250 per month.
Inspection	The franchisor’s reasonable expenses incurred in inspecting the business (whether itself, through its employees, area representatives or agents), including travel and living expenses, wages and other expenses for its employees, area representatives and agents.
Audit	The franchisor’s costs and expenses, including costs for an independent accountant and attorneys’ fees and related travel and living expenses.
Remedial Expenses	The franchisor’s reasonable expenses incurred in correcting the franchisee’s operational deficiencies.
Temporary Management	3% of the studio’s gross revenue during the period of management, plus any direct out-of-pocket costs and expenses.
Indemnification	Amount of the franchisor’s liabilities, fines, losses, damages, costs and expenses (including reasonable attorneys’ fees).
Enforcement Expenses	The franchisor’s reasonable costs and expenses (including reasonable attorneys’ fees) incurred in enforcing its rights and remedies; its reasonable costs and expenses incurred in de-identifying the studio.

The above information has been compiled from the FDD of Fred Astaire Dance Studio. Year of FDD: 2025.
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